IIFL Securities Stock Idea: Buy Zomato with Target Rs 198

IIFL Securities has issued a buy recommendation for Zomato, with a target price of Rs 198. This call is based on the current market price of Rs 190.65, implying a potential upside of approximately 4%. The recommendation is supported by Zomato's strong brand recognition, its leadership position in the food delivery market, and its focus on technology and innovation. Analysts believe that Zomato is well-positioned to benefit from the growing demand for online food delivery services in India.

About Zomato:

Zomato is an Indian online food delivery and restaurant review platform headquartered in Gurugram, Haryana. It was founded in 2008 by Deepinder Goyal and Pankaj Chaddah. The company operates in over 24 countries and has a presence in over 10,000 cities. Zomato's platform allows users to search for restaurants, read reviews, and order food online. The company also offers a subscription service, Zomato Pro, which provides users with exclusive discounts and benefits. Zomato's revenue comes from commission fees charged to restaurants and delivery charges charged to customers.

52 Week Price Trend:

Zomato's current market price (CMP) of Rs 190.65 is significantly higher than its 52-week low of Rs 49, reflecting a substantial recovery in its stock performance. However, it remains below its 52-week high of Rs 168.50. The company's stock price has been volatile in recent months due to factors such as investor concerns about its profitability, competition from rivals, and the overall market sentiment. Despite the current gap between its CMP and 52-week high, Zomato's strong brand recognition, expanding user base, and potential for future growth make it an attractive investment for long-term investors willing to tolerate short-term price fluctuations.

Stratzy's MOST Analysis:

Stratzy's MOST framework has rated Zomato BB-. This indicates that the stock has a medium fundamental risk. The rating is based on an assessment of the company's management, outlook, safety, and trend. Zomato's management is considered to be experienced and capable, while the outlook for the company is positive. The company's safety is considered to be moderate, as it faces some competition from other food delivery companies. The trend for the company is positive, as it is growing rapidly.

Fundamental and Technical information provided in this blog were last updated on 05 Apr, 2024

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